Union Budget of India is the annual financial statement of the central government for the upcoming financial year—from April 1 to March 31—which is tabled before both houses of the parliament by the government. In other words, the budget of India is the statement of revenue and expenditure of the government. Under Article 112 of the Constitution of India, the government has to present the budget to inform both the houses about its projected income and expenditure. The budget of India is divided into two parts: Capital Budget and Revenue Budget. Apart from these, the budget of India also includes the fiscal estimates for the next financial year
Who prepares the Budget?
Though the finance minister is entrusted with the process of preparing and presenting the budget, the budget is made through consultations involving the ministry of finance along with various ministries and the NITI Aayog. After the beginning of a new financial year, the ministry of finance issues guidelines for spending. In consonance with the guidelines, different ministries, Union Territories, departments and defence forces prepare their spending estimates. Comprehensive meetings are then held between the ministries/departments and the department of expenditure—a key body of the ministry of finance. The budget division in the finance ministry finally produces the budget.UNION BUDGET 2024.
History of the union budget 2024
The first budget in independent India was passed by India’s first finance minister R K Shanmukham Chetty on November 26, 1947.
Objective of budget
The union budget strives for a balanced economic development, which, in turn, would foster social justice and an egalitarian society. In 2019, finance minister Nirmala Sitharaman said that the objective of the budget was a strong nation along with strong citizens. Budget 2020, which will soon be presented on 1 February 2019, is likely to introduce some new fiscal policies that will give strong impetus to our staggered economy. The overall goal of the Union Budget is to achieve our country’s quick and balanced economic growth while also promoting social justice and equality. The goal is to ensure effective resource allocation, minimise unemployment and poverty, reduce wealth and income disparities, keep prices under control, and reform the tax system.
Steps to prepare Union Budget 2024
1- At the start of the budget-making process, the finance ministry sends circulars to all ministries, states, union territories, and autonomous organisations. These circulars contain basic forms as well as essential guidelines, which ministries utilise to convey their requirements and Gexpectations.These ministries provide their previous year’s earnings and spending, as well as provide estimates. After receiving requests, key government officials examine them and consult with ministries and the expenditure department.
Once the data has been authenticated, the finance ministry assigns revenue to several divisions for upcoming outlays. If there is a disagreement over how money should be divided, the finance ministry consults with the Union Cabinet or the Prime Minister.
2- For a better understanding, the Department of Economic Affairs and Revenue communicate with other stakeholders, such as agriculturists, small company owners, and foreign institutional investors.
3- The finance ministry regularly has pre-budget discussions with various stakeholders to learn about their views and needs. Participants include state leaders, agriculturists, bankers, economists, and labour organisations. Before confirmation, all requests are considered further by the Prime Minister.
4- The government has a yearly custom of holding a halwa ceremony a few days before the Budget is presented. The event marks the beginning of Budget document printing. As part of the celebration, a massive “kadhai” (big frying pot) is used to make “halwa,” which is then fed to the whole finance ministry workers.
5- The last stage of the budget-making process is the presentation of the budget to Parliament. The finance minister gives the presentation on the first day of the Budget session. During the presentation, the minister summarises the important aspects of the text and explains the logic behind the suggestions.
Importance of Union Budget 2024:
A union budget not only ensures a viable tax structure, but also provides for rapid economic development. The importance of union budget stems from the following factors:
1)Forming efficient fiscal policies: The union budget of India allows the government to implement the economic policies, which are in consonance with the country’s overall economic development.
2) Allocation of economic resources: The union budget of India allows for equitable distribution of economic resources. It allows the policymakers to reduce income disparities through taxation and the provision of subsidies.
3)Reducing unemployment: The goal of the budget of India is to create ample employment opportunities so that every citizen has access to basic facilities. An increase in employment opportunities not only tackles the issue of poverty, but also results in a productive workforce—a must for economic development.
4Curbing inflation: The budget of India also strives to curb the sharp price rise during inflation. Surplus budget policies are implemented to maintain price stability.
5) Revising tax structure: A revision in tax structure, including changes in direct and indirect taxes, is essential for equitable distribution of income. Thus, a union budget provides for a viable income tax structure by revision of tax rates and tax brackets.
6)Propelling the economy towards sustainable growth: Through optimal distribution of resources, reduction in unemployment and poverty, curbing inflationary trends, and implementation of viable tax mechanism, the economy is propelled towards sustainable growth.
Summary
Following the presentation, the Budget is presented to both chambers of the Parliament for Govt to raise subsidy for rooftop solar installation to 60% The government is set to increase the subsidy for rooftop solar installations to about 60% under the new Pradhan Mantri Suryoday Yojana, union minister for new and renewable energy R.K. Singh said on Friday debate. The Budget is sent to the President for approval once it has been approved by both chambers.
Budget creation is a time-consuming procedure that involves several processes and consultations. Each stage is critical to ensuring that public funds are used wisely and allocated effectively. The significance of this document cannot be overstated since it governs how the government operates and uses its resources to build the country.
Conclusion
The Finance and Corporate Affairs Minister Smt Nirmala Sitharaman, while presenting the Interim Union Budget for 2024-2025 in Parliament today announced that the capital expenditure outlay for the next year is being increased by 11.1 per cent to Rs 11,11,111 crore, which would be 3.4 per cent of the GDP.
The Finance Minister stated that strong growth in economic activity has imparted buoyancy to revenue collections and pointed out that GST collection stood at ₹1.65 lakh crore in December 2023.This is the seventh-time that gross GST revenues have crossed ₹1.6 lakh crore benchmark
Author : Sneha
College: Bhagat Phool Singh Mahila Vishwavidylaya